Stock Market Review: July 26, 2023

The Nigerian stock market on Tuesday closed on a bullish note with 1.11% growth. Year to date, the market has returned 28.76% with the All Share Index and Market Capitalisation at N35.934 trillion respectively.

In a stock market review with the MD/CEO of Global View Capital Limited, Aruna Kebira, the following were discussed:

Excerpts:

The market on Tuesday closed on a positive with 1.11% growth, bringing the All-Share Index to 65,988.81 points. How sustainable is this growth?

The market on Tuesday closed in the green zone as two of the SWOOTs stocks closed higher. MTN closed at N284.90 from the previous close of N270.00 while Seplat closed higher at N1,539.70 from a previous close of N1,399.80.

These stocks contributed immensely to the ASI closing at above 65,000 points.

But that does not preclude the contribution of the other less-weight stocks that help also in the ASI closing high. Like FTN Cocoa, JapaulGold and DAARcom.

The market was tepid for most stocks as the market awaits the outcome of the 292nd MPC meeting.  The hike in the MPR by the MPC to me is just marginal and I believe that the market would discountenance the increase and continue on its set trajectory.

But investors should be wary as prices continue to pursue their new 52-week high prices.

FBNH has announced that it will raise capital via the Rights Issue. How will this benefit existing shareholders?

Rights Issues are ways for issuers to raise funds while giving the current shareholders the option of first refusal. As we know Rights prices are always offered at a discount from the market price.

It also enables those who have the funds to increase their stakes in the said company, more so that there are extant battle lines drawn in the case of FBNH.

It may give ample opportunity to those who want to increase their holdings and edge out competitors

The only drawback is if the issuer can make commensurate earnings to sustain the dilution of shares.

It is said in my place that you don’t ask a kid not to grow large teeth, he /she is advised to grow big lips to be able to cover them appropriately.

What is the driving the growth in Seplat and FTN Cocoa?

Seplat has been stagnant for quite a while. It has not had its fair share of the current frenzy and rally in the market and the oil and gas industry is not doing badly.

With the fuel subsidy removal and the price of a barrel of oil in the international market, it has only taken Seplat so long a time to respond.

The funds that had been assessed by FTN Cocoa is still exciting the market.

In their just released Q22023 earnings, FTN has zero turnover, it, therefore, behooves on me that this momentum in the price is just market sentiments and speculation.

The stock has been tagged by the NGX as RST, which means restructuring, well, it depends on what would be the outcome of the restructuring exercise, but for a company with zero revenue as of H1 2023, I don’t know where is going.

Unilever Nigeria Plc’s Q2 2023 result was not that fantastic. EPS is currently 2 kobo. How attractive will Unilever be at the current price?

Unilever despite the lackluster performance, witnessed an increase in its price from N15.95 to N17.50.

I think what the stock is currently enjoying is the sentiment and the run of the moment in the market

With the MPR now at 18.75%, how would this impact the capital market?

To me the hike in the headline interest rate is marginal and I believe the current market situation would help discountenance the effect and the market may come back to its bullish drive currently prevalent in the market arena.

What are the stocks to watch?

WAPCO, Fidelity, FCMB, Access, Julius Berger, and Flour Mills

Source: Stock Market Review: July 26, 2023 – StocksWatch (stocksng.com)

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